Scott Administration Avoids Cuts, Follows Steady Spending Path In 2021 Budget
Gov. Phil Scott's proposed $1.6 billion general fund budget does not include cuts to essential services and is balanced with surplus funds from last year. But officials warned Tuesday the budget is subject to two huge variables: the spread of the coronavirus, and spending decisions in Washington.
Administration Secretary Suzanne Young said the 2021 fiscal year spending plan is far from normal, and that the state benefited from a surplus, federal funds and record revenues last year. She added next year's budget process, for fiscal year 2022, looks even more difficult.
“We need to understand that this is the FY ‘21 budget with an awful lot of coronavirus relief and one-time money helping us through this,” Young said. “And we may not have that in FY ‘22. We're going to start building that budget very soon now. And that is going to be our challenge.”
"We need to understand that this is the FY '21 budget with an awful lot of coronavirus relief and one-time money helping us through this. And we may not have that in FY '22." — Administration Secretary Suzanne Young
Finance Commissioner Adam Greshin used a number of nautical metaphors to describe the administration’s approach to writing this budget.
“This budget best represents a calm hand on the tiller steering through troubled waters,” he said. “There are still a fair amount of questions that haven’t been answered both in Washington as well as in Vermont, both with our economy and in our revenue stream. We’ve kept a calm hand to really have a steady-as-you go budget. And we will wait to see what occurs.”
The administration will maintain a hiring freeze and a freeze on executive pay increases. But no cuts to services are expected, Greshin said, adding the budget is about 1.5% higher than the governor’s proposed FY ‘20 budget.
“This budget by no means qualifies as an austerity budget,” he said. “This budget meets the requirements that we have [for] the programs and services we deliver to Vermonters.”
"This budget by no means qualifies as an austerity budget. This budget meets the requirements that we have [for] the programs and services we deliver to Vermonters." — Finance Commissioner Adam Greshin
The Legislature convenes Aug. 25 to work on the budget. Young said the Scott administration has several major priorities, including adding funds to a grant program aimed at helping businesses hurt by the COVID-19 pandemic.
The administration has asked for a $133 million increase in the program. Young said the idea is to direct money to companies that fell through the cracks in the first round of grants.
“There's a hope that the Legislature can expand the existing business grant program to cover some of those businesses left behind," she said. "For instance, some have suffered less than a 50% loss that's required to be eligible. We want to drop that down to 30[%].”
The money would also help some non-profit organizations, and assist companies that have been in business for less than a year.
Another $12 million in federal COVID relief funds would be used for remote learning and to increase child care services for parents whose school-age children are not able to attend full-time due to the pandemic.
The administration also wants to spend $20 million to supplement a brief extension of federal unemployment benefits.
President Donald Trump issued an executive order earlier this month that would use Federal Emergency Management Agency funds to boost unemployment benefits by $300 per week -- half of what people had been receiving until early August.
Young said the federal government requires a match from the states. The Scott administration wants to use federal COVID relief funds to increase the benefit.
“This would allow Vermont, if the Legislature earmarked that money, to add $100 to that $300 benefit,” she said.
About 40,000 people would be covered, officials said. The benefits are expected to last only about three or four weeks.
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